The market needed this break from the past two months of disappointing existing home sales, and it couldn’t come at a better time as things begin to heat up for the spring home shopping season. Improvement in February existing home sales overall, despite wintry weather that likely forced many home shoppers to stay home last month, is an indicator of continued underlying strength and demand from buyers. Strong sales in the West – which was spared much of February’s wintry weather — drowned out weather-driven weakness in the Northeast. This demand looks sustainable, too, as a robust economy finally begins to meaningfully push up wages and make homeownership more achievable. Still, despite ongoing demand from buyers, there are a series of headwinds mounting in the existing sales market that look to be getting harder to overcome in the longer term. Inventory fell year-over-year yet again. It’s difficult to close a lot of sales when there are so few homes available to buy, and inventory of existing homes has been steadily declining for almost three years now. Coupled with rising mortgage interest rates that are at their highest since early 2014, this one-two punch has created a situation in which existing sales appear to be plateauing at around 5.5 million sales per year, well below the 6 million or more we might otherwise expect to see. To get to those levels, demand needs to stay hot, builders need to continue ramping up new home activity and more sellers need to feel comfortable selling. Threading that needle has so far proven difficult.